F5 Networks (NASDAQ:FFIV) shares jumped more than 11% in pre-market Tuesday after the company reported Q3 earnings, with EPS of $3.21 coming in better than the consensus estimate of $2.86.
Revenue grew 4% year-over-year to $703 million, beating the consensus estimate of $698.81M. Global services revenue increased 8% year-over-year, while product revenue was up 1%, reflecting 5% systems revenue growth and software revenue that was down 3%.
“We are delivering the gross margin improvement and operating leverage we committed to, and we are confident in our ability to achieve our target of double-digit non-GAAP earnings growth for fiscal year 2023,” said CEO François Locoh-Donou.
For Q4/23, the company expects EPS in the range of $3.15-$3.27, compared to the consensus of $3.22, and revenue in the range of $690-$710M, compared to the consensus estimate of $702M.
Goldman Sachs analysts highlighted software strength.
"FFIV’s has demonstrated effective cost discipline with opex better-than-expected, driven in part by headcount reductions in April. Cost savings should be the primary driver of FFIV’s reiterated F2024 target of DD% EPS growth and at least 300 bps of margin expansion," the analysts wrote.
Additional reporting by Senad Karaahmetovic